The drinks giant announced it will close the Johnnie Walker bottling plant in Kilmarnock, ending 200 years of links with the town, and a distillery in Port Dundas, Glasgow.

However, the loss of 900 jobs will be offset by the creation of 400 posts when a new factory is built in Leven, Fife

Diageo said the alternative blueprint, submitted by John Swinney, the Scottish finance minister, would cost the firm significantly more and still lead to 500 jobs losses.

Despite the promise of a sizeable taxpayer-funded subsidy, the firm said Mr Swinney had provided “no workable alternative to deliver what Diageo needs”.

The Scottish finance minister described the rejection as “deeply disappointing”, but did not respond to criticism that his plan would have cost the public purse millions of pounds and saved few jobs.

The announcement is also a blow to Alex Salmond, the First Minister, who joined a rally in Kilmarnock protesting the cuts and told the cheering masses: “We’re going to achieve something for the workforces of Scotland.”

The alternative plan would have seen production continue at Port Dundas and the creation of a new plant in Kilmarnock, albeit with only about half the 900 jobs being saved.

It would also have meant scrapping the 400 posts earmarked for Fife, prompting accusations SNP ministers were “playing off” one area of Scotland against another.

David Gosnell, the firm’s managing director of global supply, said: “We examined the alternative proposals thoroughly. They don’t deliver a business model that would be good for either Diageo or Scotland.

“We need a sustainable Scottish operation that supports our international spirits business and provides a future for the 4,000 people we would employ in Scotland after this restructuring is completed.

“I appreciate their efforts but the taskforce has no workable alternative to deliver what Diageo needs.”

He said the alternative blueprint had failed to breach a “significant economic gap”, with the closure of the Kilmarnock and Port Dundas plants projected to save the company £75million.

Keeping both sites open would “embed inefficiencies”, he said, and Mr Swinney presented no long-term plan for saving Port Dundas other than delaying closure.

Significantly, there would still be a net loss of around 500 jobs and “no investment at Leven and minimal job creation there”.

Diageo has ended its discussions with ministers, and will now focus on consulting with employees and trade unions on how the job losses will be implemented.

Mr Swinney said the “strongest arguments” had been submitted for keeping the two plants open, and insisted the alternative plan had been deliverable and cost effective.

He added: “I still do not believe that Diageo appreciate the social consequences of their financial decision in turning their backs on 200 years of history in Port Dundas and Kilmarnock.”

Willie Coffey, SNP MSP for Kilmarnock, accused Diageo of acting “shamefully” and described the job losses as “a devastating blow for an intensely loyal workforce.”

But Labour blamed SNP ministers for the closures. Iain Gray, the party’s Holyrood leader, said: “I am deeply disappointed that John Swinney has been unable to bring forward a plan capable of convincing Diageo to save these jobs.”

However, Tavish Scott, the Scottish Liberal Democrat leader, said: “There’s no point in a political blame game, because that won’t bring one job back.

“Everyone needs to pull together to help those who have lost their job today get back into work as quickly as possible.”

(source: http://www.telegraph.co.uk/finance/newsbysector/epic/dge/6162148/Diageo-rejects-unworkable-plan-to-save-Johnnie-Walker-whisky-jobs.html)